Fill fraction not only has a profound impact on the process of deflagration to detonation in pulsed detonation engine, but also affects the propulsion performance in both flight and ground tests. In this paper, a novel optical diagnostic method based on detonation exhaust radiation in visible and near-infrared region within 300–2600 nm is developed to determine the current working state in the gas–liquid two-phase pulsed detonation cycle. The results show that the radiation characteristic in each stage of detonation cycle is unique and can be a good indicator to infer the fill fraction. This is verified experimentally by comparison with the laser absorption spectroscopy method, which utilizes a DFB laser driven by ramp injection current to scan H2O transition of 1391.67 nm at a frequency of 20 kHz. Due to concentrated radiation intensity, time duration reaching accumulated radiant energy ratio of 50% in detonation status would be smaller than 1.2 ms, and detonation status would be easily distinguished from deflagration with this critical condition. In addition, the variation of important intermediates OH, CH, and C2 radicals during detonation combustion are obtained according to the analysis of detonation spectrum, which can also be proposed as a helpful optical diagnostics method for the combustion condition based on C radical concentration. The study demonstrates the feasibility of optical diagnostics based on radiation in visible and near-infrared regions, which could provide an alternative means to diagnose and improve pulsed detonation engine performance.